DOE Strangely Less Eager to Distribute Loans After Solyndra Fallout

Erika Johnsen

4/5/2012 1:00:00 PM - Erika Johnsen

Congressional Democrats have indignantly insisted that Republicans have merely been "manufacturing a scandal" and "dancing on Solyndra's grave" with their probe of the federally supported, failed solar company, but I think Republicans deserve nothing but props for holding the Obama administration's feet to the fire on this one. The government funneling half-a-billion taxpayer dollars into a project that conveniently benefits them politically, but fails the test of the free market, is no small thing. By making Solyndra a consant headache for the Department of Energy, Republicans are encouraging a little more accountability and a little less falling over ourselves to disburse public funds into environmentalist pipe dreams, if you please -- especially germane in light of yesterday's revelation that the Treasury was given 'about one day' to review and sign off on the Solyndra project because of the DOE's hurry to seal the deal and smile for the cameras:

Federal financial experts weren’t consulted on a half-billion federal loan to a failed solar company until the last minute, and only then had “about a day” to complete their review, an internal watchdog concluded Wednesday.

The report from the Treasury Department’s inspector general found that the department’s review was “rushed” and began only after the Energy Department was poised to sign off on the terms of a $528 million loan to Solyndra Inc. The review was completed a day before Energy issued a press release saying it was approving the loan with conditions.

Treasury officials complained to the White House that regulations governing federal loan guarantees say that the department should have been involved earlier in the process, but the inspector general said it was unclear whether the review’s late start violated the law.

Unfortunately for taxpayers, Solyndra wasn't even close to being the only company to receive a DOE loan guarantee, but it appears that at least some of the Obama administration's other malinvestments may have difficulty getting their payouts, and may have to -- horror of horrors -- turn to the outside private investors to fight for their survival. You know, just like every other company that doesn't get political special treatment because the current governing regime won't be able to tout any successes to their environmental base.

Today, the situation is the opposite, industry officials say: The department is putting loans through such exacting reviews that some renewable-energy funds look as if they never will be disbursed.

The issue came into focus Tuesday when the new chief executive of Fisker Automotive Inc. said the company would consider giving up on a hybrid-electric car factory in Delaware and building it overseas if it can't secure its financing.

Until recently, the cornerstone of that financing was to come from a $529 million loan by the Energy Department. Vice President Joe Biden visited the site—a closed General Motors Co. plant—in October 2009 when the deal was approved and touted it as a part of a strengthening of American manufacturing.

The department froze loan disbursements last May after Fisker missed a performance milestone, and the two sides have been negotiating since. Fisker now is seeking new partners. It announced $392 million in new financing earlier this week and Chief Executive Tom LaSorda said that if an overseas investor emerges, the factory could move abroad.

Mr. LaSorda's statement renewed calls by some for the Energy Department to make an up-or-down decision on the Fisker money. "We are still waiting for DOE to make this decision and are urging a decision to be made soon," said Ian Koski, spokesman for Sen. Chris Coons (D., Del.). Mr. Koski said the senator respected the department's need to protect taxpayers but said relocation of the plant "is the trajectory the project is on" unless Fisker gets "the financing they were counting on" or other backing.

While I think it's more than safe to say that the Obama administration will never free the energy market from its central-planning clutches, Republicans have diligently disallowed them from sweeping their carelessness under the rug, and it looks like maybe the DOE is at least starting to be a bit more cautious about throwing around taxpayer money for politically profitable loan guarantees. Took 'em long enough.